In Kenya, Bitcoin linked to popular mobile payment system

Using the Bitcoin system will allow for cheaper international remittances in Kenya

"We are under no illusion that our service is going to satisfy hardcore bitcoin nerds," Braendgaard said. "This is fine for small transactions for people to use on some devices."

The bitcoins are also not stored on a mobile device. Bitcoin uses public key cryptography to complete transactions, and Kipochi's servers securely store the bitcoins' private key needed to send the currency, Braendgaard said.

So far, Kipochi is just a web service, but developers are working on an operator menu for use on feature phones. People in the U.S. are blocked from using Kipochi to send bitcoins due to regulatory concerns, Braendgaard said.

Perhaps surprisingly, Kipochi doesn't have a plan to make money. Aside from the fees a user pays to buy or sell bitcoins at the exchange and the fees associated with M-Pesa, Kipochi itself is free.

Braendgaard said Kipochi is a "loss leader" intended to spur more interest in Bitcoin in developing countries. But Braendgaard said he is working on a merchant platform called "Soko" that uses bitcoin. He won't reveal many details, but said the platform will tackle authentication issues around payments and scenarios such as recurring subscriptions.

But before a merchant platform is feasible, people have to start using Bitcoin. Braendgaard said he has seen many virtual currency projects fail, but Bitcoin holds the most promise of any.